CBI predicts sharp rise in financial sector job losses
by Gill Montia
A new survey from the Confederation of British Industry (CBI) indicates that job losses in the financial sector will rise sharply during the first quarter of 2009.
According to the CBI, the acceleration will correspond with record falls in business activity and profitability across the industry, which will be blighted by lower fee revenues and falls in income from interest.
The research found that a majority of financial services firms do not expect markets to function normally for at least six months and are committed to cutting costs in the meantime.
The UK financial sector employs around one million people and job losses could rise from approximately 10,000 in the final quarter of last year, to between 12,000 and 15,000 in the first quarter of 2009.
The CBI’s director general, John Cridland, comments that as income and profitability have tumbled, there will be more job losses and cuts in investment, adding that this has stark implications for the rest of the UK economy.
The survey also found that sentiment across the sector remained at 18-year lows, excluding general insurance where confidence increased.
Since the beginning of 2009, sub-prime lender Cattles has announced plans to cut 1,000 jobs and Barclays has reviewed its IT operations, resulting in the loss of 158 permanent and 250 contractor positions.
Bank of America Corporation’s integration of Merrill Lynch will also put UK jobs under threat; a worldwide cull of 35,000 is expected over the next three years.
Finally, major job losses are expected during 2009 from the merger of Lloyds TSB and HBOS.
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